July 16, 2015
Rep. Peters Intros Bill to Help Hard-Working, Struggling Americans Reduce Personal Debt Burden
“Millions of Americans are struggling to reduce their debt burden, and in doing so are delaying major purchases, including buying a car or a home, that would help spur our economy both in San Diego and across the country,” Rep. Peters said. “This bill will make it easier for those who are working hard to pay off personal loans – students with college loan burdens, families with a health emergency, and more – to avoid being unfairly taxed for trying to do the right thing.”
The legislation would exempt up to $2,500 of forgiven personal and household debt from federal income tax liabilities. Currently, when consumer debt is discharged and forgiven the consumer is taxed on the ‘income’ derived from the reduced liability. This bill will incentivize consumers to repay the debt quickly and bolster both their personal credit scores and the national credit market.
Jerry Sanders, San Diego Chamber of Commerce President and CEO, added in support of the legislation that “When creditors and collectors discount charged-off consumer debt, this helps consumers repay their debt obligation and that, in turn, helps the credit market. This legislation will allow credit to be more accessible and at more affordable rates.”
Sheryl Wright, Encore Capital Group’s Senior Vice President of Corporate & Government Affairs, said “We offer the majority of our consumers deep discounts on their debt and hope that in tandem with the ‘Consumer Debt Forgiveness Tax Relief Act,’ they will be fully empowered to repay their debt obligations. The current system creates a ‘one step forward, two steps back’ approach for consumers in that it hinders their ability to repay their debt and slows their progress toward a better financial footing. We thank Congressman Peters for championing this effort that is good for both consumers and the credit market alike.”
Congressman Peters serves the 52nd District of California which covers much of central San Diego County including Poway, Coronado, and large portions of the City of San Diego. He is a member of the House Armed Services Committee and House Judiciary Committee. The Congressman is a former environmental attorney, City Council President, and Port Commission Chairman.